Ronald A. Woessner, an advocate for strengthening the US capital markets and former Senior Counsel to the Financial Services Committee of the US House of Representatives, said “the US public markets are an on-ramp to nowhere for many smaller companies.”
Mr. Woessner added, “The US public markets are dying. The number of US public companies fell by 46% from 1996 to 2016, despite the US economy having grown by nearly 65 percent on an inflation adjusted basis during the same period. Similarly, entrepreneurship in America is dying. The number of US entrepreneurs dropped at an alarming pace from 2006 to 2017 according to the US Census Bureau, despite entrepreneurship now being taught in US colleges and universities.”
He continued, “More and more US startups are starved for funding and fail. As more startups fail, there are fewer to go public. For those startups that do survive and grow and then become eligible to be a public company -- many delay as long as possible before entering the public markets.
Why? Because the US public markets are inhospitable to many smaller companies. The US public markets have become a business purgatory for many and a death trap for some -- rather than providing smaller companies an opportunity to become the next great American company as they did in the past.
These two reasons explain why the number of US public companies is declining and the US public markets are dying.”
“As more startups fail and with fewer companies going public, fewer Americans are willing to quit their jobs and become entrepreneurs. This explains why entrepreneurship in America is dying.
Fewer public companies and fewer new businesses means fewer jobs, especially for minorities.”
“There is a cure for the dying US capital markets and entrepreneurship. It is illuminated in my comments filed with the SEC in response to an SEC Request for Comment regarding Market Structure Innovation for Thinly Traded Securities. My comments are publicly available at https://www.sec.gov/comments/s7-18-19/s71819-6671698-204008.pdf.”
Mr. Woessner added: “The SEC Request for Comment demonstrates that the SEC is concerned about the declining number of US public companies and is evidence of its determination to identify the causes and create policy solutions that strengthen the American capital markets and grow the economy.”
About Ronald Woessner
Mr. Woessner, principal of Woessner & Associates, mentors start-ups and emerging growth businesses with the singular objective of helping them grow and thrive as both private and public companies. He also advocates for government policies that strengthen the US capital markets and promote capital access to enable small businesses to grow and create jobs for all Americans. Mr. Woessner is former Senior Counsel to the Financial Services Committee of the US House of Representatives. He previously served as General Counsel to two smaller-cap technology NASDAQ listed companies and as CEO of an OTC Markets company that up listed to NASDAQ. Mr. Brent Bushnell, Texas A&M School of Law J.D. candidate, class of 2020, assisted with the comments filed with the SEC.
Contact Information: Ronald A. Woessner at https://www.linkedin.com/in/ronwoessner/.
